Senate Debates Reg Restructuring and Considers Gaggle of Amendments

Credit unions received a reprieve on data-reporting requirements but were still waiting on amendments on interchange fees and the agency to regulate consumer financial products as the Senate began in earnest to discuss the financial overhaul bill last week.

The Senate passed by voice vote an amendment by Sen. Olympia Snowe (R-Maine) to strike language from the legislation that would have required credit unions and other financial institutions to provide the new consumer financial regulator with detailed information about the number and amount of deposits by census tract and other demographic data.

CUNA and NAFCU had pushed for this amendment and said the disclosure requirements that were stricken from the bill would have imposed compliance burdens on small credit unions and duplicated existing requirements that the NCUA has in place.

At press time, however, lawmakers had not taken action on several amendments that would alter the scope of the new consumer regulator.

The main GOP alternative would leave responsibility for enforcing consumer protection laws for banks, thrifts and credit unions with the prudential regulator. A new division within the FDIC would supervise and enforce consumer laws for nonbank mortgage originators and other providers that violate consumer protection statutes.

Given the Democrats' 59-41 majority, that measure was expected to have a difficult time passing.

However, Sen. Lisa Murkowski (R-Alaska) had proposed amendments that exempted all financial institutions with assets of $5 billion or less from any rules issued by the new consumer regulator.

As currently written, all financial institutions must comply with the regulations issued by the new entity but only those with assets of $10 billion or more would be examined by the consumer regulator.

He planned to introduce three amendments, which would mandate a lower interchange fee on debit card transactions; guarantee that the interchange fee for the government is the lowest possible rate because the government is such a heavy user of credit cards; and give retailers additional flexibility by letting them set a maximum or minimum limit for purchases with a credit card or other payment device and let merchants not accept certain cards if they deem the processing fees to be too high.

CUNA and NAFCU joined with American Bankers Association and the Independent Community Bankers of America to oppose these amendments.

"In every one of these approaches proposed by merchant lobbyists, the amendments will deliver devastating consequences to community banks and credit unions, the very financial institutions most committed to building communities and serving local customers," they wrote lawmakers. The measure would strike "at the very core of our local economies," and squeeze smaller institutions out of the marketplace, they added.

The Senate also hadn't acted on a proposed amendment by Sen. Tom Harkin (D-Iowa) that would limit ATM charges to 50 cents per transaction for nonmembers or nondepositors.

Both CUNA and NAFCU opposed the amendment and said the fees cover maintenance and operational costs incurred by the ATM owner and encourage customers to withdraw money from their own institutions.

The Senate was also slated to vote on an amendment by Sen. Bernard Sanders (I-Vt.) that would allow Congress to request an audit of all of the operations of the Federal Reserve, including its decisions on monetary policy. A similar amendment is included in the House bill that passed last December.